Nvidia (NVDA) is "outgrowing" expectations and competition even in the middle of supply constraints, Morgan Stanley said in a note Thursday.
"We have consistently had the view that the persistently negative tone from supply chain checks is highly misleading, and that seems pretty clear," Morgan Stanley said, noting the company's improving GB200 rack supply.
The investment firm said lost revenue in Q1 from the ban of Nvidia's H20 chip, which is intended for the Chinese market, was larger than expected but the possibility for "at least some recovery of the China opportunity" remains.
Morgan Stanley raised its fiscal 2026 estimates for Nvidia to $4.33 in non-GAAP earnings per share on revenue of $198.82 billion, from its previous forecast of $4.09 and $190.82 billion respectively.
Morgan Stanley reiterated Nvidia as its top pick in semis and raised its price target to $170 from $160 previously, while keeping an overweight rating.
Shares of Nvidia were up 4.9% in recent Thursday trading.
Price: 141.41, Change: +6.60, Percent Change: +4.89
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